Can we be sure of certainty?

One of the questions many clients ask is "what does the future of insurance look like?"

You would think that with all the initiatives in the last few years that buyers of insurance should be feeling more comfortable when purchasing a product.

We have seen:-

1/  The introduction of contract certainty so that clients actually get an agreed policy at inception

2/  AIRMIC initiatives to obtain insurer commitment to improved claims handling

3/  Tighter regulation and oversight by the FSA and now FCA

4/  The new Insurance Act that means policyholders know insurers will not use warranties or exclusions for example that are not relevant to a loss

It is quite likely that in the near future London Specialty markets will introduce some form of direct deal for straightforward claims and then we will see much of the emphasis of claims service sit around the larger more complex losses. To achieve this requires a technology platform which today is certainly in reach if not already there.

This would sound again like good news for insureds as simple losses up to sensible levels of claim should be handled and settled much quicker. 

The bit that remains missing is for clients to have claims certainty. Not that a claim will be paid from the outset but certainty as to how the claim will be handled. Talk to any client and they want to know what they have to do, when and how. They also want to know how they will be treated and what to expect. Insurers who provide this certainty and strong customer care skills will excel.

We cannot continue to have clients left in a vacuum not knowing what is going on, how long it will take and how they should manage their shareholders

Without going into names I am currently advising a client in such a situation. They waited months for real engagement from their insurer, their broker never provided any claims advice and now we are in a situation where the insurer and broker are squabbling over such simple but vital points like which policy applies. 

The trouble here is that even if you report such matters to the FCA (which is applicable to my example rather than the FOS) they will not tell you whether they are investigating so the insured has little confidence that actually they will ever get a fair resolution. Where is the certainty of process? Not all claims are covered and believe it or not clients do understand this but if the process does not manage their expectations then the industry will continue to fail them.

It is my view that Insurers should examine what "claims certainty" could really look like in practice and those like Swiss Re who make a real commitment to their clients will lead the way for the future. A future that certainly should be an improvement on the past!